Option Investor
New Plays
HAVING TROUBLE PRINTING?
Printer friendly version
New Plays
Long Plays
Short Plays
BKH None
DIOD

New Long Plays

Black Hills - BKH - close: 38.15 change: +0.77 stop: 36.85

Company Description:
Black Hills Corporation is a diversified energy and communications company. Black Hills Energy, the wholesale energy unit, generates electricity, produces natural gas, oil and coal, and markets energy. Our retail businesses are Black Hills Power, an electric utility serving western South Dakota, northeastern Wyoming and southeastern Montana; Cheyenne Light, Fuel & Power, an electric and gas distribution utility serving the Cheyenne, Wyoming vicinity; and Black Hills FiberCom, a broadband communications company. (source: company press release or website)

Why We Like It:
Traders might find multiple reasons to be bullish on BKH. The utility sector has been hitting a string of new all-time highs for almost a month now and the positive momentum has not been lost on BKH. Shares of BKH have been climbing in what looks like a rising channel with support near the simple 40-dma. The current bounce is a rebound from support. Short-term technical oscillators have turned positive again with the bounce. Today's gain put BKH at a new 3 1/2 year high and at the top of its recent trading range. BKH's Point & Figure chart is also bullish and points to a $61 target. We also note that BKH's dividend yield is about 3.37 percent. We might normally pass on BKH because the stock can move somewhat slowly. However, this time BKH looks ready to make the next stair step higher. We are suggesting that traders confirm the breakout with a trigger to go long at $38.20. Our target is the $39.85-40.00 range before BKH's early August earnings report. 

Picked on July xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/05/05 (unconfirmed)
Average Daily Volume: 232 thousand

---

Diodes Inc. - DIOD - close: 32.48 change: +1.53 stop: 30.45

Company Description:
Diodes Incorporated is a leading manufacturer and supplier of high-quality discrete semiconductor products, primarily to the communications, computing, industrial, consumer electronics and automotive markets. The Company operates three Far East subsidiaries, Diodes-China (QS- 9000 and ISO-14001 certified) in Shanghai, Diodes-Taiwan (ISO-9000 certified) in Taipei, and Diodes-Hong Kong. Diodes-China's manufacturing focus is on subminiature surface-mount devices destined for wireless devices, notebook, flat panel display, digital camera, mobile handset, set-top box, DC to DC conversion, and automotive applications, among others. Diodes-Taiwan is our Asia-Pacific sales, logistics and distribution center. Diodes-Hong Kong covers sales, warehouse and logistics functions. The Company's 5" wafer foundry, Diodes-FabTech (QS-9000 certified), specializes in Schottky products and is located just outside Kansas City, Missouri. The Company's ISO- 9001:2000 corporate sales, marketing, engineering and logistics headquarters is located in Southern California.
(source: company press release or website)

Why We Like It:
Let us warn you right off the bat that we consider this an aggressive play. The semiconductor sector did rally back above support/resistance at the 420 level but there is clear resistance for the SOX semiconductor index in the 440 region. Meanwhile DIOD has clear resistance near $34.00. So why suggest a long play here? First we note that DIOD out performed the market and its peers with the 4.9 percent rally today that broke through its three-week trend of lower highs. Second we noticed that DIOD is bouncing from a trendline of support dating back to its January 2005 lows. Third, you can see that its short-term RSI and stochastic indicators are turning positive and its MACD is nearing a new buy signal. Fourth, the P&F chat is already in a buy signal that points to a $37 target. We are willing to speculate on a bullish play here but with a relatively tight stop loss at $30.45. Our target would be the $36.50-37.00 range but we'll exit ahead of the late July earnings report. More conservative traders may want to exit early near $34.00. The biggest risk here, assuming DIOD keeps climbing, is a negative earnings report from chip-giant Intel (INTC) on July 19th. 

Picked on July 05 at $32.48
Change since picked: + 0.00
Earnings Date 07/27/05 (unconfirmed)
Average Daily Volume: 249 thousand

New Short Plays

None today.

Premier Investor New Play Archives